The binding of phosphoinositide-specific phospholipase C-delta 1 (PLC-delta 1) to bilayer membranes composed of phosphatidylcholine (PC) and phosphatidylinositol 4,5-bisphosphate (PIP2) was measured in the presence or absence of inositol phosphates. Binding was inhibited by the natural D-isomer of myo-inositol 1,4,5-trisphosphate (D-InsP3), but not by the L-isomer. The concentration of D-InsP3 required to decrease binding by 50% was 5.4 +/- 0.5 microM. 1-(alpha-Glycerophosphoryl)-D-myo-inositol 4,5-bisphosphate and D-myo-inositol 2,4,5-trisphosphate were nearly as effective as D-Ins(1,4,5)P3. D-myo-inositol monophosphate with phosphate esterified at either positions 1 or 2 of the myo-inositol ring, had no significant effect on binding. D-myo-inositol 1,4-bisphosphate weakly inhibited the binding, whereas the 4,5-isomer was nearly as potent as D-InsP3. Neither ATP nor inorganic phosphate significantly affected binding. As expected, D-Ins(1,4,5)P3 but not L-Ins(1,4,5)P3 decreased the initial rate of PIP2 hydrolysis in bilayer vesicles. The concentration required to decrease hydrolysis by 50% was 12.4 +/- 0.5 microM. A catalytic fragment of PLC-delta 1 that lacks a domain necessary for high affinity PIP2 binding was prepared as previously described (Cifuentes, M. E., Honkanen, L., and Rebecchi, M. J. (1993) J. Biol. Chem. 268, 11586-11593). In contrast to the native enzyme, the rate of PIP2 hydrolysis, catalyzed by the fragment, was not affected by D-Ins(1,4,5)P3. These data suggest that high affinity binding of the enzyme to PIP2 and processive catalysis, involve specific recognition of the 4- and 5-position phosphates of the inositol ring. Our results are consistent with feedback inhibition by the polar head group product, D-Ins(1,4,5)P3, at a step that precedes catalysis, namely interfacial recognition.